Following Monday’s 12.7-cent check higher, January natural gas futures followed along with the rest of the petroleum complex in trolling lower for support on Tuesday. The prompt month hit a low on the day of $6.58 before settling a few minutes later at $6.621, down 30.2 cents.

After starting the day in the $6.90s, the lack of any real cold temperatures in most natural gas consuming regions, joined by weakness in the petroleum arena, left natural gas with nowhere to go but down.

Heating oil and crude both had fairly big days lower, with January heating oil coming in 2.61 cents lower at $1.2236 and January crude settling a whopping $1.52 lower at $41.46.

“There is not only a lack of weather, but also — depending on what weather service you’re using — the near-term temperatures are expected to be much above normal for the entire eastern half of the country. So it is not just the lack of cold weather, it is also the fact that temperatures are going in the total other direction,” said Steve Blair of Rafferty Technical Research in New York.

Blair said that there is no question that weather played a huge role in Tuesday’s slip lower. “To confirm that this is a lack-of-weather market, one only has to look at the structure,” he said. “The rest of the winter strip was down substantially Tuesday, while the spring, summer and the beginning of winter 2005-2006 are really not down that much. This market is showing the effects of no weather, high storage and the propensity to keep its eye on heating oil.”

On the technical side, Blair said that $6.65 was his first major support level. He noted that the next area they are looking at is $6.50.

Turning attention to Thursday morning’s storage report release, IFR Energy Services’ Tim Evans said that while the futures market is still being dragged down by the weight of its elevated storage levels, heating degree day accumulations for last week came in as forecast, so he is sticking with his 85-95 Bcf withdrawal estimate for the week ended Dec. 3.

“Current demand looks weak though, with this week’s heating degree day accumulations only expected to run about the same level as two weeks ago,” he said. “While the weekly details may vary, this leaves a general pattern of bearish year-on-five-year average comparisons for at least the next few weeks.”

Citigroup’s Kyle Cooper said he is looking for a draw between 78 and 68 Bcf, noting that this range was brought down to this level after all of the data was compiled. “This would be considered a rather bearish report on both an absolute and temperature-adjusted basis,” Cooper said. “Looking forward, it is considered quite possible that more than 100 Bcf could be added to the yearly storage surplus over the next two reports.”

Thursday’s storage report number will go up against last year’s 111 Bcf pull and the five-year average withdrawal of 101 Bcf.

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